The Kafusi Company has the following budgeted sales:
The regular pattern of collection of credit sales is 30% in the month of sale, 60% in the month
following the month of sale, and the remainder in the second month following the month of
sale. There are no bad debts.
53. The budgeted cash receipts for July would be:
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54. The budgeted accounts receivable balance on May 31 would be:
Mitchell Company had the following budgeted sales for the last half of last year:
The company is in the process of preparing a cash budget and must determine the expected
cash collections by month. To this end, the following information has been assembled:
Collections on credit sales:
60% in month of sale
30% in month following sale
10% in second month following sale
55. Assume that the accounts receivable balance on July 1 was $75,000. Of this amount,
$60,000 represented uncollected June sales and $15,000 represented uncollected May sales.
Given these data, the total cash collected during July would be:
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56. What is the budgeted accounts receivable balance on December 1?
Sartain Corporation is in the process of preparing its annual budget. The following beginning
and ending inventory levels are planned for the year.
Each unit of finished goods requires 2 grams of raw material.
57. If the company plans to sell 670,000 units during the year, the number of units it would
have to manufacture during the year would be:
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58. How much of the raw material should the company purchase during the year?
LHU Corporation makes and sells a product called Product WZ. Each unit of Product WZ
requires 2.5 hours of direct labor at the rate of $15.00 per direct labor-hour. Management
would like you to prepare a Direct Labor Budget for June.
59. The budgeted direct labor cost per unit of Product WZ would be:
60. The company plans to sell 38,000 units of Product WZ in June. The finished goods
inventories on June 1 and June 30 are budgeted to be 600 and 100 units, respectively.
Budgeted direct labor costs for June would be:
Hardy, Inc., has budgeted sales in units for the next five months as follows:
Past experience has shown that the ending inventory for each month should be equal to 20%
of the next month’s sales in units. The inventory on May 31 contained 1,640 units. The
company needs to prepare a production budget for the next five months.
61. The beginning inventory for September should be:
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62. The total number of units produced in July should be:
Young Enterprises has budgeted sales in units for the next five months as follows:
Past experience has shown that the ending inventory for each month should be equal to 10%
of the next month’s sales in units. The inventory on May 31 fell short of this goal since it
contained only 400 units. The company needs to prepare a Production Budget for the next five
months.
63. The beginning inventory in units for September should be:
64. The total number of units to be produced in July is:
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65. The desired ending inventory for August is:
Casper Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 3.5
kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the next five
months is as follows:
The company wants to maintain monthly ending inventories of Jurislon equal to 10% of the
following month’s production needs. On July 31, this requirement was not met since only
6,900 kilograms of Jurislon were on hand. The cost of Jurislon is $3.00 per kilogram. The
company wants to prepare a Direct Materials Purchase Budget for the next five months.
66. The desired ending inventory of Jurislon for the month of September is:
67. The total cost of Jurislon to be purchased in August is:
Balmforth Products, Inc. makes and sells a single product called a Bik. It takes three yards of
Material A to make one Bik. Budgeted production of Biks for the next five months is as
follows:
The company wants to maintain monthly ending inventories of Material A equal to 20% of
the following month’s production needs. On January 31, this target had not been attained since
only 2,000 yards of Material A were on hand. The cost of Material A is $0.80 per yard. The
company wants to prepare a Direct Materials Purchases Budget.
68. The total cost of Material A to be purchased in February is:
69. The desired ending inventory of Material A for the month of March is:
70. The total needs (i.e., production requirements plus desired ending inventory) of Material
A for the month of May are:
The Yost Company makes and sells a single product, Product A. Each unit of Product A
requires 1.2 hours of labor at a labor rate of $8.40 per hour. Yost Company needs to prepare a
Direct Labor Budget for the second quarter.
71. If the budgeted direct labor cost for May is $161,280, then the budgeted production of
Product A for May is:
72. The budgeted direct labor cost per unit of Product A is:
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73. The company has budgeted to produce 20,000 units of Product A in June. The finished
goods inventories on June 1 and June 30 were budgeted at 400 and 600 units, respectively.
Budgeted direct labor cost for June is:
Davol Corporation is preparing its Manufacturing Overhead Budget for the fourth quarter of
the year. The budgeted variable manufacturing overhead rate is $6.80 per direct labor-hour;
the budgeted fixed manufacturing overhead is $72,000 per month, of which $20,000 is factory
depreciation.
74. If the budgeted direct labor time for October is 5,000 hours, then the total budgeted
manufacturing overhead for October is:
75. If the budgeted direct labor time for November is 5,000 hours, then the total budgeted
cash disbursements for November must be:
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76. If the budgeted direct labor time for December is 4,000 hours, then the predetermined
manufacturing overhead per direct labor-hour for December would be:
The manufacturing overhead budget at Mahapatra Corporation is based on budgeted direct
labor-hours. The direct labor budget indicates that 7,900 direct labor-hours will be required in
May. The variable overhead rate is $9.50 per direct labor-hour. The company’s budgeted fixed
manufacturing overhead is $112,970 per month, which includes depreciation of $18,170. All
other fixed manufacturing overhead costs represent current cash flows.
77. The company recomputes its predetermined overhead rate every month. The
predetermined overhead rate for May should be: